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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
Under which circumstance can unions enhance efficiency?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
Unions can improve efficiency when they neutralize the market power of a dominant employer in a region, helping to create a more balanced labor market. Simply raising wages above equilibrium or lowering outsider wages does not necessarily lead to efficiency gains. Likewise, threatening strikes without action does not affect overall efficiency.
More Labour Market MCQs
Practice related questions from the same subject.
- 1.How do unions typically contribute to widening the wage gap between union members and non-union workers?
- 2.Which of the following reasons explains why companies might choose to pay efficiency wages?
- 3.Which of the following government actions is least likely to decrease the unemployment rate?
- 4.What happens if the wage rate is set above the competitive equilibrium wage for any reason?
- 5.What is the typical effect of a minimum wage law on employment levels?